In the proposed study, we seek to address a basic scientific question: Is it possible to predict the development of anxiety disorders among young children whose parents have panic disorder (PD)? This question is straightforward, yet the answer has broad implications. Although it is well established that children of parents with PD are at high risk for anxiety disorders, only some of these children will develop psychopathology. The identification of a predictor would facilitate primary prevention by delineating a group of young children at very high risk for anxiety disorders among those already at risk by having a PD parent. During the prior funding period we have completed a cross-sectional study of over 200 children at risk for PD and comparison offspring of normal control parents. Our sample is unique in that the children have been identified and characterized extensively before they entered the age of risk for childhood anxiety disorders. These youngsters have already been assessed for behavioral inhibition, psychophysiological markers, and early signs of anxiety as well as for markers of psychosocial adversity. A subsample who have grown old enough to be reliably assessed for DSM-IV diagnoses, have already been assessed for psychopathology using structured clinical interviews. Therefore this valuable sample affords us the unique opportunity to track the development of dysfunction and psychopathology in prospectively followed children at risk for psychopathology. To our knowledge, this would represent the largest such sample followed longitudinally. As we describe in the Progress Report, our work suggests that multiple domains of measurement will be useful predictors of psychopathology in high risk children. These domains are: parental disorders, child temperament (as indexed by "behavioral inhibition to the unfamiliar" [BI]), psychophysiologic abnormalities, and psychosocial adversity. The proposed work seeks to validate these measures as predictors of subsequent psychopathology and dysfunction by following up the sample five years after their baseline evaluation. The main aims of this project were determined by our past 12 years of work studying BI and anxiety disorders among young children. Our three main aims are: l) to characterize the psychopathologic and functional outcomes of children at risk for panic disorder; 2) to determine predictors of adverse outcomes among children at risk for anxiety disorders; and 3) to characterize the developmental sequence of anxiety disorders in these children. Moreover, under separate funding, we are collecting DNA samples from this cohort of families. Thus, by assuring that DNA samples will be available in the future, we leave open the possibility that our sample will be useful for prospectively predicting psychiatric disorders and disability from putative anxiety genes. Given that we are also assessing adverse features of the environment, we will also be able to determine if gene-environment interactions play a role in the genesis of anxiety disorders.